Ecuador Seeks Legal Action Against Chevron

QUITO (Dow Jones) - Ecuador's attorney general wants legal action in the U.S. against Chevron Corp. (CVX), after the company released videos that it says showed undue influence on a court case involving Chevron.

In a statement, Attorney General Washington Pesantez said Chevron could be held accountable under the U.S. Foreign Corrupt Practices Act, and called on Ecuador's state prosecutor to open a legal suit in the U.S.

Ecuadorian indigenous groups sued Texaco, which Chevron acquired in 2001, in the U.S. District Court in New York in 1993, alleging the company polluted Amazon rain forest and rivers, causing environmental and health damage.

That court said the case should be resolved by an Ecuadorian court, and the plaintiffs filed a lawsuit in the small jungle city of Lago Agrio.

Chevron released recordings last month that it claims show Judge Juan Nuñez, who oversaw the Lago Agrio court where the trial is being held, affirming to two businessmen that he would hold the company culpable for environmental damages.

Last week, Nuñez, who denies the charges that a decision in the case had already been taken, recused himself from the case. Nuñez has said the videos were doctored, but Chevron says experts have confirmed their authenticity.

One of the businessmen in the video is a former Chevron contractor, Diego Borja, who Chevron says handed over the footage to its lawyers. The other businessman involved in the recordings was an American with no previous relationship with the oil company, Chevron said. Neither one has been made available for comment.

Other material, including videos and e-mails, show alleged undue influence of Ecuadorian party officials in the $27 billion lawsuit, the company says.

Ecuador's Pesantez alleged in a statement that those two businessmen had been present in meetings where activities took place that would be against the law in the U.S.

Chevron spokesman James Craig denied the California-based oil company was involved in "any act of corruption" and said the attorney general's announcement "is just the latest effort to deflect attention from the Ecuador government's meddling in the Lago Agrio litigation and, more broadly, of the complete politicization of its judiciary."

"The Ecuadorian authorities seem more intent, on manufacturing a case against Chevron, than in pursuing a fair investigation," he added.

An attorney for the plantiffs, Steven Donziger, said Chevron may be trying to discredit the Ecuadorian judicial system, which the company has repeatedly claimed is biased against it.

The attorney general's office has requested that Chevron's lawyers appear for depositions. That government office also wants other people who appear in the videos to appear for depositions.

In 1998, following a $40 million remediation program, based on a 1995 agreement between Texaco and state oil company Petroecuador, Ecuador's government released Texaco and its related companies from any claims and liabilities regarding cleanup efforts.

The plaintiffs say the agreement didn't release it from third-party claims.

Chevron blames Petroecuador for most of the pollution, and says the state oil company has never fulfilled its responsibility to remediate its share of the venture's production site.